Audit report, Clarke County Board of Education, Athens, Georgia, year ended June 30, 1998

AUDIT REPORT CLARKE COUNTY BOARD OF EDUCAnON
ATHENS, GEORGIA YEAR ENDED JUNE 30, 1998

CLARKE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATIONSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

6

C

COMBINED STATEMENT OF REVENUES, EXPENDITIJRES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

9

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

10

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

24

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

25

DEBT SERVICE FUND

G

COMBINING BALANCE SHEET

26

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES .

27

FIDUCIARY FUND TYPE

COMBINING STATEMENT OF CHANGES INASSETS AND LIABILITIES

AGENCY FUNDS

28

SCHEDULES

1 SCHEDULE OF EXPENDITIJRES OF FEDERAL AWARDS

29

2 SCHEDULE OF STATE REVENUE

31

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

32

4 SCHEDULE OF EXPENDITIJRES

LOTTERY PROGRAMS

33

CLARKE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS-

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

S

OVERALL

3S

6

BY PROGRAM

36

SECTIONll
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

CLAVOE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suile 214 Atlanta, Georgia 30334-8400
March 25,1999

Honorable Roy E. Bames, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe Clarke County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATIONSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the Clarke County Board of Education, as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility of the Clarke County Board ofEducation's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and the standards applicable to fInancial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and signifIcant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 1998, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

98ARL-13A

* The general purpose financial statements of the Board did not contain a General Fixed Assets
Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the general purpose .
financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1998, a portion of salaries
and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1998. Also funds received, subsequent to June 30, 1998, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were improperly recorded in the year ended June 30, 1998. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
* Governmental Accounting Standards Board Technical Bulletin 98-1, Disclosures About Year 2000
Issues, requires disclosure of certain matters regarding the year 2000 issue in order for financial statements to be prepared in conformity with generally accepted accounting principles. Such required disclosures include:
o Any significant amount of resources committed to make computer systems and other electronic
equipment year 2000 compliant;
o A general description of the year 2000 issue, including a description of the stages of work in
process or completed as of the end of the reporting period to make computer systems and other electronic equipment critical to conducting operations year 2000 compliant.
o The additional stages of work necessary for making the computer systems and other electronic
equipment year 2000 compliant.
Clarke County Board of Education has omitted such disclosures. We do not provide assurance that Clarke County Board of Education is or will be year 2000 ready, that Clarke County Board of Education's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Clarke County Board of Education does business will be year 2000 ready.
The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects ofsuch adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph, and except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements
98ARL-13A

referred to above present fairly, in all material respects, the financial position of the Clarke County Board of Education as ofJune 30, 1998, and the results ofits operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated March 25, 1999, on our consideration ofthe Clarke County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the Clarke County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through I) and the financial schedules (Schedules 1 through 6), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133,
Audits olStates. Local Governments, andNon-Profit Organizations, are presented for purposes ofadditional analysis and are not a required part of the general purpose financial statements. Such information has been
subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effect of adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfY ourselves as to the accuracy of the food service inventories as discussed in the third paragraph, and except for the effects of the matters referred to in the fourth paragraph, such information is fairly presented in all material respects in relation to the general purpose fmancial statements taken as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:gp 98ARL-13A

CLARKE COUNTY BOARD OF EDUCATION

CLARKE COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES ANp ACCOUNT GROUp JUNE30 1998

~
Cash and Cash Equivalents
Investments
Accounts Receivable Regular Accounts Long-Term Accounts Receivable from Individuals
Long-Term Notes Receivable
Prepaid Items
Due from Other Funds
Inventories Consumable Supplies Food Donated Commodities Purchased Food
Amount Available in Debt service Fund
Amount to be Provided in Future Years For Payment of: Bond Debt Capital Lease Agreements Long-Term Notes Payable Compensated Absences

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 1,049,403.29

$ 12,400,546.93

$ 40,433,931.55

487,855.88 76,786.75
2,134.03
81,277.18

1,102,136.91

189,618.14

110,506.04

130,750.34 35,568.16

Total Assets

$ 13,159,106.81 $ 2,317,858.70 $ 40,623,549.69

The notes to the general purpose financial statements are an integral parl of this statement. -2-

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPES AGENCY FUND

$

44,121.00 $

31,392,19

11,446,676.16

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS (Memorandum Only) JUNE 30, 1998 JUNE 30,1997

$ 1,124,916.48 $ 5,617,125.26

64,281,154.64

55,662,644.90

2,379,198.85

120.01

4,158,929.79 76,786.75
2,134,03
81,277.18

1,089,397.40 101,508.00 5,541.51
81,039.47 2,130.22

$ 13,867,876.65

110,506.04
130,750.34 35,568.16
13,867,876.65

171,941.26
108,429.76 46,640.11
8,094,466,33

47,372,123.35 1,108,696.90 125,803.80 345,952.06

47,372,123.35 1,108,696.90 125,803.80 345,952.06

58,570,533.67 1,765,627.56 135,481,04 329,533.69

$ 13,869,996.01 $

31,512,20 $ 62,820:452.76 $ 132.822:476.17 $ 131:782,040.18

-3-

CLARKE COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30 1998

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPES AGENCY FUND

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS (Memorandum Only) JUNE 30, 1998 JUNE 30, 1997

$ 3,462,517.19 $ 1,434,915.05

$

2,119.36

1,544,291.68

1,825,453.54

802,411.91

726,116.49

11,946.32

15,343.40

838,633.72

225,993.22

2,130.22

$

31,512.20

31,512.20

16,726.34

$ 1,108.696.90

1.108.696.90

1,765,627.56

345,952.06

345.952.06

329,533.69

125,803.80

125,803.80

135,481.04

61.240,000.00

61,240,000.00

66,665,000.00

$

2,119.36 $

31.512.20 $ 62,820,452.76 $ 69,737,759.00 $ 72,916,327.33

$ 13,867,876.65
0.00 $ 13,867,876.65

$

882.14 $

867.94

76,786.75

2,134.03

13,867.876.65

17,981.40 489.63
101,508.00 5.541.51
8.094,466.33

110,506.04

171,941.26

130,750.34 35,568.16 39,364,010.03

108,429.76 46.640.11 40.867,185.20

133,948.34 1.000,000.00 8,361,386.75

136,806.67 9,314,722.98

$ 63,084,717.17 $ 58,865,712.85

$ 13,869,996.01 $

31,512.20 $ 62,820,452.76 $ 132.822,476.17 $ 131,782,040.18

-5-

CLARKE COUNJY BOARD OF EDUCATION COMBINED STATEMENT OF RElIENUES EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1998

~
Slate Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community services Operations
CapiialOullay Debt Service
Principal Interest Escrow Agent Payin9 Agent Fees
Tolal Expendilures
Excess of Revenues over (under) Expendilures
OTHER FINANCING SOURCES IUSES)
Accrued Interest on Bonds Sold Premium on Bonds Sold Proceeds of Refundin9 Bonds
Par Value Operating Transfers In Operatin9 Transfers Out
Total Other Financin9 Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expendilures end Other Financin9 Uses
FUND BALANCE JULY 1
Food Inventory Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL RElIENUE
FUND

$ 37,088,530.29 $ 46,650.75
28,416,947.60
2,169,343.33

2,638,748.59 6,894,293.44
1,105,260,51

$ 67,701,371.97 $ 10,638,300.54

$ 41,526,231.20 $
2,560,047.59 1,535,908.74 1,667,702.86
721,735.87 4,663,387.42
654,568.33 7,367,010.33 4,179,828.39 1,256,877.13
118,044.10
781,14.0.46 3,582.93
601,172.94 119,235.00

4,691,060.75
644,265.00 364,298.68
11,027.55 233,050.76
29,595.26 26,401.08 26,194.00 55,437.26
239,704.14 4,214,098.47
65,434.98 5,132.77

67,776453.29 $ 10,625,698.68

$

-75,081.32 $

12,601.66

$

$

-129,856.98

$

-129,856.98 $

129,856.98 129,856.98

-204,938.28 $ 8,901,625.40

142,458.82 1,002,435.92

22,320.58 -11,071.95

FUND BALANCE JUNE 30 The notes to the general purpose financial statemenls are an integral part of this statement.
-6-

$ 8,698,687.12 $. 1156,143.37

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 1998

JUNE 30, 1997

$ 2.490.870.15
2490.870.15 $

$
13,807,497.63 243.194.14
14.050,691.77 $

39,707,276.88 6,940,944.19
42,224,345.23 6.008.668.13
94,881 ,234.43 $

36,699,178.23 6,621,531.77
31,334,398.95 3.562.890.69
78.217,999.64

$ 3,994,045.32 $
$ 3994 045.32 $ -1.503,175.17 $

$
5,425,000.00 2,765,682.09
80,000.00 6,599.36
8,277.281.45 5,773.410.32

46,217.291.95
3,224,312.59 1,920,207.42 1,678,730.41
964,786.63 4,692,962.68
680,969.41 7,393,204.33 4,235,265.65 1,256,877.13
357,748.24 4,214,096.47
781,140.46 3,997,628.25
6,091,607.90 2,890,049.86
80,000.00 6,599.36
90.673.478.74
4.207,755.69

43,203,519.05
2,682,417.22 1,931,425.20 1,640,416.41
900,681.87 4,255,781.70 1,105,449.34 6,897,185.23 3,753,225.08
993,767.06 659,575.46 3,817,103.52 727,617.B2 121,592.35
2,022,006.70 1,336,325.19
7.164.08
75 955 243.28
2.262,756.36

113,051.32 95,93B.00

45,000,000.00

$

129,856.96

4,106,842.50

-129.856.96

-4 106,842.50

$

0.00 $ 45,208,9B9.32

-1,503,175.17 $ 40,867,185.20

5,773,410.32 $ 8,094,466.33

4,207,755.69 $ 58,B65,712.85

47,471,745.68 11,419,399.34

22,320.58 -11,071.95

-35,969.22 10537.05

39.364,010.03 $ 13.867.876.65 $ 63.084,717.17

58.865:712.B5

-7-

CLARKE COUNTY BOARP OF EOUCATION

.

COMBINED STATEMENT OF RElIENUES EXPENDITURES ANp CHANGES IN FUND BALANCES

BUDGET ANp ACTUAl. - INON4MP BASISI

GENERAL ANp SPECIAl RElIENUE FUNPS
YEAR ENDEp JUNE 30 1998

EXHIBIT"C"

GENERAL FUND

ACTUAl.

(BUDGET

BUDGET

BASIS)

~

Stale Funds Federal Funds Taxes Other Funds

$ 34,722,272.00 $ 37,068,530.29

25,000.00

48,650.75

27,596,134.00 28,416,847.60

1,338,748.00

2,169,343.33

Total Revenues

$ 63,682.152.00 $ 67,701,371.97

EXPENPITURES

Current Instruction Support Servioes pupn Servloes Improvement 01 Instructional Servioes Educational Media Servioas General Administration SChool Administration Business Administration Maintenance and Oparation of Plant Student Transportation Services Central Support Servloes Other Support Servloes Food Services Oparation Community Services Oparations
Capital Outiay DabtService

$ 40,857,483.00 $ 41,528,231.20

2,296,394.00 1,540,736.00 1,563,413.00
778,779.00 4,588,671.00
742,135.00
7,886,138.00 4,686,384.00 1,315,994.00
125,568.00

2,580,047.59 1,535,908.74 1,667,702.86
721,735.87 4,663,367.42
654,568.33
7,387,010.33 4,179,828.39 1,266,877.13
118,044.10

875,166.00 219,000.00

781,140.48 3,582.93
720,407.94

Total Expend~ures

$ 67,075,659.00 $ 67.776,453.29

Exoess of Revenues over (under) Expand~res

$ -3,393,707.00 $

-75.081.32

OTHER FINANCING SOURCES IUSES>

Other Sources OIherUses

$ -129,856.96

Total Other Financing Sources (Uses)

$ -129.856.96

Excess of Revenues and Other Financing Sources over (undar) Expend~res and Other Financing Uses $ -3,393,707.00 $

-204,938.28

FUNp BALANCE JULY 1 1997

8,521,644.86

8,901,825.40

Food Inventory - Net Chango Ih Period Donated Commodities Purchased Food

SPECIAl. REVENUE FUND

ACTUAl.

(BUDGET

BUDGET

BASIS}

$ 2,495,317.00 $ 2,638,748.59

6,948,110.00

6,894,293.44

1,089,990.00

1.105,260.51

$ 10,531,417.00 $ 10.638,300.54

$ 4,588,975.00 $ 4,691,060.75

702,242.00 411,765.00
5,000.00 300,699.00 57,413.00
29,000.00 43,510.00

644,265.00 384,298.68 11,027.55 233,050.76 29,595.26 26,401.08
28,194.00 55,437.26

281,584.00 3,845,892.00

239,704.14 4,214,096.47

70,667.73

$ 10,266,080.00 $ 10,625,698.68

$ 265,337.00 $

12,601.86

$ 129,866.96

$

129,856.96

$ 265,337.00 $ 142,456.82

1,066,338.18

1,002,435.82

22,320.58 -11,071.95

FUNP BAlANCE JUNE 30 1998

$ 5,128,137.86 $ 8,696.687.12

$ 1,331,673.18 $ 1,156,143.37

The notes to the general purpose financial statements are an integral part of this statement. -9-

CLARKE COUNTY BOARD OF EDUCATION

EXlllBIT "0"

NOTES TO TIlE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Clarke County Board ofEducation (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an accOunt group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available fmancial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board ofeducation.
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department ofEducation and from the Federal government to accomplish specific educational objectives.
10 -

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

. NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of maj or capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
FIDUCIARY FUND TYPES - the funds used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. These funds include:
AGENCY FUNDS - the funds used to account for assets held in a fiduciary capacity for other funds, governments, or individuals.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding, material accrued compensated absences long-term notes payable and material capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (Le., revenues and other financing sources) and decreases (Le., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Agency funds are purely custodial in nature and do not involve measurement of results of operations.
Governmental funds are accounted for using the modified accrual basis ofaccounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.
- 11 -

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1998, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1997 and ending in early June 1998. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1998, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1998, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1998. Also, the State's portion of the compensation paid in July and August 1998 was received and recorded as revenue in the fiscal year subsequent to June 30, 1998. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were recorded in the year ended June 30, 1998. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
Agency funds are accounted for using the modified accrual basis of accounting in recognizing assets and liabilities.
BUDGET
The Clarke County Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.

- 12

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
COMPOSmON OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its fimds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSmON OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its fimds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State ofGeorgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office ofTreasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia

-13 -

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

.

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

RECEIVABLES

REGULAR ACCOUNTS Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

LONG-TERM RECEIVABLES FROM INDIVIDUALS Long-term receivables from individuals consist of amounts due from various individuals for court ordered restitution payments due to the Board.

LONG-TERM NOTES RECEIVABLE

Long-term notes receivable consist ofamounts due from various individuals who have failed to fulfill the contractual requirements for their sabbatical leave of absence.

PROPERTY TAXES

The Clarke County Board ofCommissioners fixed the property tax levy for the 1997 tax year (calendar year) on July 15, 1997 (levy date). Taxes were due on October 20, 1997. The lien date for property taxes was January 1, 1997. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. The Clarke County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

The tax millage rate levied for the 1997 tax year (calendar year) for the Clarke County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

~mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax collected by the State and remitted to the Board during the fiscal year amounted to $13,706,017.02 and was recorded in the Debt Service Fund. The State will terminate collection of this tax once an additional $76,293,982.98 has been collected or on June 30, 2002 whichev~r
occurs first.

- 14-

CLARKE COUNTY BOARD OF EDUCATION

EXIllBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INVENTORIES

CONSUMABLE SUPPLIES INVENTORY Inventories ofconsumable supplies are reported on the Combined Balance Sheet at weighted average cost. The Board uses the consumption method to account for consumable supplies inventory whereby an asset is recorded when supplies are purchased and expenditures are recorded at the time supplies are utilized. The inventory reported on the balance sheet is equally offset by a reservation offund balance which indicates that it does not constitute "available spendable resources" even though it is a component unit ofnet current assets.

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations offund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.

PREPAID ITEMS

Payments made to vendors for services that will benefit periods subsequent to June 30, 1998, are recorded

as prepaid items.

.

COMPENSATED ABSENCES

Compensated absences represent obligations of the Board relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payinent is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion ofthis obligation as this amount is deemed immaterial to the general purpose financial statements.

GENERAL OBLIGATION BONDS

The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. In addition, general obligation bonds have been issued to refund existing general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount ofthese bonds is recorded in the General Long-Term Debt Account Group.

- 15 -

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POUCIES
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation ofthis data.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATIONOF DEPOSITS Official Code ofGeorgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accoUnts.
Acceptable security for deposits consists of anyone of or any combination ofthe following:
(I) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations ofthe United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations ofthe counties or municipalities ofthe State ofGeorgia,

- 16-

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 2: DEPOSITS AND INVESTMENTS

(5) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,

(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and

(7) Bonds, bills, notes, certificates ofindebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 1998, the bank balances were $1,352,532.11. The amounts of the total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name.)

The Board's deposits are classified by risk category at June 30, 1998, as follows:

Risk Category

Bank Balance

I

$ 194,125.00

2

1,158,407.11

3

0.00

Total

$ 1 35253211

CATEGORIZATION OF INVESTMENTS Investments are classified as to risk by the three categories described below:

Category I - Insured or registered, or securities held by the Board or the Board's agent in the Board's name.
Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the Board's name.

- 17-

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 2: DEPOSITS AND INVESTMENTS

Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the Board's name.

Funds invested in an investment pool managed by another government are not required to be categorized unless the investing entity owns specific, identifiable investment securities in the pool.

AtJune 30,1998, the carrying value ofthe Board's total investments was $64,281,154.64. The investments are classified as to risk categories as follows:

Type of Investment
Repurchase Agreements
Not Subject to Categorization Requirements Local Government Investment Pools
Mutual Funds
Total Investments

Risk Categories 2

Carrying Amount

Fair Value

$ 37 11 Q49271 $_.....;...,:QIlol0lllO $ 11 488 17909 $ 48,598,671.80 $ 48,598,671.80

6,305,455.62 6,305,455.62 9377 027.22 937702722 $ 64 281 15464 $ 64 2RI 154 64

The carrying amounts shown above includes amounts maintained in an investment pool by the State of Georgia, Office of Treasury and Fiscal Services in which the Board owns no identifiable securities. The investment policy ofthe State ofGeorgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description of the Primary Liquidity Portfolio is as follows:

The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. However, Georgia Fund 1 operates in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a 2a-7 like pool. The pool is not registered with the SEC as an investment company. The pool's primary objectives are safety ofcapital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and determines participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value of the shares. Participation in the pool is voluntary and deposits consist offunds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State
of Georgia's General Fund.

- 18 -

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 2: DEPOSITS AND INVESTMENTS

Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any ofits agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity ofGeorgia Fund 1 may not exceed 60 days. Fund 6 maintains a duration ofapproximately one year. The weighted average maturity for Georgia Fund 1 on June 30, 1998 was 29 days. The average investment duration for Fund 6 on June 30, 1998 was .96 years.

Note 3: NON-MONETARY TRANSACTIONS

The Board receives food commodities from the United States Department ofAgriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories

Note 4: RISK MANAGEMENT

The Board is exposed to various risks ofloss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation.

The Board has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and natural disaster. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any of the past three years.

The Board is self-insured with regard to unemployment compensation claims. A premium is charged when needed by the General Fund to each user fund on the basis of the percentage of that fund's payroll to total payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The Board accounts for claims with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

Changes in the unemployment compensation claims liability during the last two fiscal years are as follows:

1997 1998

Beginning ofYear Liability

CIaimsand Changes in Estimates

$

. 6.294.00 $

$

1.392.55 $

9.577.73 $ 3.796.78 $

Claims Paid

End ofYear Liability

14.479.18 $ 2.858.33 $

1.392.55 2,331.00

The Board participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992 to develop, implement, and administer a program of workers' compensation self-insurance for its member organizations. The Board pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the

- 19-

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 4: RISK MANAGEMENT

Fund with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Fund in excess of $350,000.00 loss per occurrence, up to the statutory limit. Also, should losses within the retained limit of $350,000.00 aggregate to more than seventy-five percent (75%) of the standard experience rated premiwn during the policy term, the policy with the United States Fidelity and Guaranty Company will pay the next $1,000,000.00 of loss.

The Board has pmchased surety bonds to provide additional insurance coverage as follows:

Position Covered
Superintendent Board Chairman Board Vice-Chairman Each Central Office Director
Note 5: GENERAL LONG-TERM DEBT

$ 250,000.00 $ 250,000.00 $ 250,000.00 $ 250,000.00

CAPITAL LEASES The Clarke County Board of Education has entered into various lease agreements as lessee for buses and equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value ofthe future minimwn lease payments as ofthe date oftheir inception.

GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows:

Purpose

Interest Rates

Amount

General Government - Refunding" Series 1993 General Government - Series 1997

2.40% - 5.50% $16,240,000.00 4.25% - 5.125% 45,000.000.00

$61.240.000 00

The changes in General Long-Term Debt during the fiscal year ended June 30, 1998, were as follows:

Balance July I, 1997
Deductions Annual Leave Earned and Utilized (Net) Payments
Balance June 30, 1998

Long-Term Notes ravable
$' 135,481.04

General

Capital

Compensated

Obligation

Leases

AbsenceS

Bonds

Tota!

1,765,627.56 $ 329,533.69 $ 66,665,000.00 $ 68,895,642.29

9.677 24

65693066

-16,418.37

5425 000 00

-16,418.37 6091.607.90

$ 12S8038Q $ 1198 69690 $ 34595206 $ 61 240 000 00 $6282045276

- 20-

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 5: GENERAL LONG-TERM DEBT

At June 30, 1998, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30
1999 2000 2001 2002 2003 2004-2008 2009-2012
Total Principal and Interest
Deduct: Imputed Interest
Net Present Value of Future Minimum Lease Payments

Long-Term Notes Payable

Capital Leases

General Obligation
Bonds

Total Debt

$ 9,677.24 $ 580,871.20 $ 5,148,496.25 $ 5,739,044.69

9,677.24

552,944.42 15,624,923.75 16,187,54S.41

9,677.24

105,668.00 15,566,447.50 15,681,792.74

9,677.24

15,510,651.25 15,520,328.49

9,677.24

8,676,017.50 8,685,694.74

48,386.20

11,433,533.75 11,481,919.95

29031.40

103777500 1066806.40

$ 12580380$ 123948362 $ 72 997 845 00 $ 74 363 132 42

$ 13078672

$ I 10869690

LONG-TERM NOTE PAYABLE

The long-term note payable is an outstanding loan from the U. S. Environmental Protection Agency. On

June 16, 1992, the Board entered into an agreement with the U. S. Environmental Protection Agency (EPA)

for assistance in accordance with the provisions ofthe Asbestos School Hazard Agreement Authorization Act

ofl990 in the amount of$174,190.00. The terms ofthe agreement (loan) are to repay the amount in 36 semi-

annual installments of $4,838.62. The first payment was made on November 30,1993. The balance of the

loan at June 30, 1998 was $125,803.80. Final payment on the loan must be made by May 30, 2012. The loan

provides for no interest charges, except when payments are in default (late). Payments on this loan are to be

provided from the General Fund.

.

Note 6: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of$I,534,598.81 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$I,237,647.62

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$99,698.l9

21 -

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 6: ON-BEHALF PAYMENTS

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of$197,253.00

Note 7: SIGNIFICANT COMMTIMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as ofJune 30, 1998.

Unearned Executed Contracts

Bamett Shoals Elementary Renovations Bus Maintenance Renovations Cedar Shoals High Renovations Clarke Central High Renovations Fowler Drive Elementary Renovations Winterville Elementary Renovations

$ 1,244,829.00 422,289.41
2,037,621.05 10,191,821.75
805,568.55 1.114,044.00

$15 816 17376

The amounts described in this note are not reflected in the general purpose financial statements.

Governmental Accounting Standards Board Technical Bulletin 98-1 requires certain disclosures in the Notes to the General Purpose Financial Statements concerning an entity's computer related year 2000 readiness. These disclosures, which are necessary to comply with generally accepted accounting principles, have not been made by the Board.

Note 8: CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.

The Board is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine Board operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the general purpose financial statements.

- 22-

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 9: ACCUMULATED EMPLOYEES' LEAVB

Full-time twelve month employees eam annual leave ranging from ten to fifteen days each year depending upon the employees' length of continuous Board service with a maximum accumulation of thirty days. Employees are paid at their current rate of pay for unused accumulated annual leave upon retirement or termination of employment. See Note 1 - Compensated Absences

Note 10: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (I'RS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

1998

100%

$ 4,981,084.06

1997

100%

$ 4,561,890.85

1996

100%

$ 4,202,010.65

- 23-

CLARKE COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE30 1998

EXHIBIT"E"

Cash and Cash Equivalents
Accounts Receivable
Inventories Food Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY

FEDERAL

TOTALS

PROGRAMS PROGRAMS JUNE 30, 1998 JUNE 30, 1997

$ 1,176,675.87 $ 303,341.83

$ 1,480,017.70 $ 1,326,658.85

110,955.58

18,007.67 $ 973,173.66 1,102,136.91

942,371.62

130,750.34 35,568.16

130,750.34 35,568.16

108,429.76 46,640.11

Total Assets

$ 1,453,949.95 $ 321,349.50 $ 973,173.66 $ 2,748,473.11 $ 2,424,100.35

LIABILITIES AND FUND EQUITY
~
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Due 10 Other Funds
Tolal Liebilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federa! Programs For Continuation of State Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesi9naled
Total Fund Equity
Total Liabilities and Fund Equity

50,248.50 $ 249,308.16

$ 112,116.52 207,858.60
506.44

430,614.41 $ 203,137.79 327,106.40
11,432.92

430,614.41 $ 365,502.81 764,273.16
11,939.36

399,191.67 291,125.26 715,674.44
13,542.84 2,130.22

$ 299,556.66 $ 320,481.56 $ 9n,291.52 $ 1,592,329.74 $ 1,421 ,664.43

$
130,750.34 35,568.16 988,074.79 $ 1,154,393.29 $

.$ 867.94
0.00 867.94 $

882.14 $

882.14 $ 867.94

17,981.40 489.63

130,750.34 35,568.16

108,429.76 46,640.11

0.00

988,074.79

828,895.02

882.14 $ 1,156,143.37 $ 1,002,435.92

$ 1,453,949.95 $ 321,349.50 $ 973,173.66 $ 2,748,473.11 $ 2,424,100.35

See notes to the general purpose financial statements.

-24-

CLARKE COUNTY BOARD OF EDUCATION .COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAl. REVENUE FUND YEAR ENDED JUNE 30 1998

EXHIBIT"P

SCHOOL FOQD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS YEAR ENDED JUNE 30, 1998 JUNE 30, 1997

State Funds Federal Funds Other Funds

$ 270,676.00 $ 2,368.070.59

$ 2,636,746.59 $ 2,465,713.49

2,992,378.49

$ 3,901,914.95 6,894,293.44 6,492,660.17

1,103.707.31

927.70

625.50

1,105,260.51

1,057,383.63

Total Revenues

$ 4,366,761.80 $ 2,368,998.29 $ 3.902,540.45 $ 10,638,300.54 $ 10.015,957.49

EXPENDITURES

CUrTent Instruction Support Services PupU services Improvement 01 Instructional Services Educational Media services General Administration School Administration Business Administration Maintenance and Operation 01 Plant Student Transporlstion services Other Support Services Food Services Operation
Debt service Principal Payments Interest Payments

$ 1,930,215.58 $ 2,760,845.17 $ 4,691,060.75 $ 4,201,797.08

$ 4,207,582.03

266,33126 7,463.n
62,381.20
26,401.08 24,017.05 50,33126
1,476.78

3n,933.74 376,634.91
11,027.55 170,669.56 29,595.26
2,176.95 5,106.00 238,225.36 6,514.44

644,265.00 384,298.68
11,027.55 233,050.76 29,595.26 26,401.06 26,194.00 55,437.26 239,704.14 4,214,096.47

554,558.43 387,875.57
271,170.43 7,124.60
23,890.10 58,215.01 93,538.87 380,608.36 3,817,103.52

65,434.96 5,132.n

65,434.96 5,132.n

72,761.01 11,501.41

Total Expendiluras

$ 4,207,582.03 $ 2,368,619.96 $ 4,049,496.67 $ 10,625,696.68 $ 9,890,144.39

Excess of Revenues over (under) Expend~ures

$ 159,179.n $

378.31 $ -146,95622 $

12,601.86 $ 125,813.10

OTHER FINANCING SOURCES (USESl

Operating Transfel1l In Operating Transfers OUt

$ 129,856.96 $ 129,856.96 $

26,836.73 -s.n

Total Other Financing Sources (Uses)

$ 129,856.96 $ 129,856.96 $

26,830.96

Excess of Revenues and Other Financing Sources over (under) ExpendUures and Other Financing Uses $ 159,179.n $

378.31 $ -17,099.26 $ 142,456.82 $ 152,644.06

FUND BALANCE JULY 1

983,984.89

489.63

17,961.40 1,002,435.92

875,224.03

Food Inventory - Net Change in Pertod Donated Commoditiea Purchased Food

22,320.58 -l1p71.95

22,320.58 -11,071.95

-35,969.22 10,537.05

FUND BALANCE JUNE 30

$ 1,154,393.29 $

867.94 $

882.14 $ 1,156,143.37 $ l,002A35.92

See notes to the general purpose financial statements.

-25-

CLARKE COUNTY BOARD OF EDUCATION COMBINING BAlANCE SHEET DEBT SERVICE FUND JUNE 30 1998

EXHIBIT"G"

~ Cash and Cash Equivalents Investments Accounts Receivable
Total Assets

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS JUNE 30, 1998 JUNE 30, 1997

$ 44,121.00

$

44,121,00 $ 4,673,096,25

2,069,648,94 $ 9,377,027.22

11,446,676,16

3,412,428.76

424.94

2,378.773.91

2,379,198.85

8.941,32

$ 2.114,194.88 $ 11,755,801.13 $ 13,869.996.01 $ 8,094,466.33

LIABILITIES
Accounts Payable
FUND EQUITY
Fund Balances Reserved For Debt Service Unreserved Undesignated
Total Fund Equity

$

2.119,36

$

2.119.36

$ 2,112,075,52 $ 11,755,801.13 $ 13,867,876,65 $

0.00

0,00

0.00

$ 2.112,075.52 $ 11,755,801.13 $ 13,867,876.65 $

8,094,486,33 8,094,466.33

Total Liabilities and Fund Equity

$ 2,114,194.88 $ 11,755.801,13 $ 13,869,996.01 $ 8,094,486.33

See notes to the general purpose financial statements.

-26-

CLARKE COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
DEBT SERVICE FUND
YEAR ENDED JUNE 30 1998

EXHIBIT"H"

REVENUES
Taxes Other Funds
Total Revenues
EXPENDITURES
Debt Service Principsl Intarest Call Premium Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES IUSES)
Accrued Intarest on Bonds Sold Operating Transfers In
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures end Other Finencing Uses
FUND BALANCE JULY 1

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30, 1998 JUNE 30,1997

$ 101,480.61 $ 13,708,017.02 $ 13,807,497.63 $ 2,895,708.30

108,025.51

135,168.63

243,194.14

155.874.81

$ 209,506.12 $ 13,841.185.65 $ 14,050691.77 $ 3051,583.11

$ 1,425,000.00 $ 568,995.25
4849.36

4,000,000.00 $ 2,195,685.84
80,000.00 1,750.00

5,425,000.00 $ 2,765,682.09
80,000.00 6,599.36

1,355,000.00 1,167,376.25
7,154.08

$ 1.998,845.61 $ 6.278,435.84 $ 8,277,281.45 $ 2,529,530.33

$ -1,789,339.49 $ 7,562,749.81 $ 5.773,410.32 $ 522,052.78

$ 113,051.32 4,080,000.00
$ 4,193,051.32

$ -1,789,339.49 $ 7,562,749.81 $ 5,773,410.32 $ 4,715,104.10

3,901.415.01

4,193,051.32

8,094.466.33

3,379,362.23

FUND BALANCE JUNE 30

$ 2,112m5.52 $ 11:755,801.13 $ 13,867,876.65 $ 8,094,486.33

See notes to the general purpose financisl statemenls.

-27-

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAl( PROJECTS
yEAR ENDED JUNE 30 1998

SCHEDULE "3"

Retiring the remaining $4,000,000.00 in outs1anding principal emount of the School District's series 1987 general obligation school bonds on the earliest possible redemption date, at a maximum cost of $4,204,365.00.
Making payments on the School District's series 1993 general obligation refunding school bonds from January 1, 1998 through July 1, 1999 and to fund an escrow account on that date to dete... the remaining series 1993 general obligation refUnding school bonds to their final maturity date of July 1, 2008, at a total cost of $17,890,347.00.
Providing funds to pay the costs of acquiring, constructing and equipping a new Cedar Shoals High School. Adding to, renovating, repairing, improving and equipping Clarke Central High School. AcqUiring any necessary real or personal property and equipment and adding to, renovating, repairing, improving and equipping existing educational buildings, properties and facilities of the School District and paying 8JCp8nses incident thereto, at a cost of approximately $68,000,000.00.

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED
COST (2)

AMOUNT EXPENDED IN CURRENT YEAR (3114)

AMOUNT EXPENDED
IN PRIOR YEARS

$ 4,204,365.00 $ 4,204,365.00 $ 4,080,000.00

17,890,347.00 17,890,347.00 1,613,215.00

68,000,000.00 67,905,288.00 3,994,045.32 $ 5,450.00

$ 90,094,712.00 $ 90,000,000.00 $ 9,687,280.32 $ 5,450.00

(1) Tha Board's original cost estimate es specified in the resolution calling for the imposition of the Local Option.
(2) The Board's current estimate of total cost for each project. Includes all cost from project inception to completion.
(3) The voters of Clarke County approved the imposition of a 1% sales tax to fund the above projects. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the project.
(4) In eddition to the expenditures shown above, the Board incurred current year interest expenditures in the amount of $1,785,020.64 to provide edvenced funding for the above projects.

See notes to the general purpose financial statements.

32

ClARKE COUNTY BOARD OF EDUCATION
SCHEDULE OF EXPENPITURES
LOTTERY PROGRAMS
YEAR ENpED JUNE 3D 1998

SCHEDULE "4"

EXPENDITURES
Cu",,"t lns1nJcticn Support 5ervioos Pupil 5ervices Improvement of Instructional Services GenetlllAdminlstrlltion Business Administration Maintenance and Operation of Plant Student Transportatioo 5ervioos Other Support Servioos

ALTERNATIVE SCHOOL PROGRAM

INSTRUCTIONAl. TECHNOLOGY

ASSISTIVE

CLASSROOM

TECHNOLOGY TECHNOLOGY

PRE-l<INDERGARTEN PROGRAM

$

4.057.30 $

18.007.67 $ 293.895.05 $

1.614,255.56
266.331.26 7.463.77
62,381.20 26,401.08 24,017.05 50,331.26
1.478.78

TOTAL
1.930,215.58
266.331.26 7.463.77
62.381.20 26.401.08 24.017.05 50,331.26
1.476.78

Total Expenditures

4.057.30 $_-l'~8'l:00::.:7~.6::.7

293.895.05 $

2,052.659.96 $ 2.368.619.96

RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Alternative School Program Instructional Technology Assistive Technology Classroom Technology Pre-Kindergarten Program

$ 1.365.508.96
4.057.30
18.007.67 293.895.05 687.151.00

2.368,619.98

see notes to the general purpose financial statements.

-33-

CLARKE COUNIY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS OVERALL
GENERAL FUND QUALlIY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1998

SCHEDULE "S"

Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis
Salaries Operations
Less: Expenditures for Media Center Programs in Excess of Total Media Allotment
Expenditures per Audit
Amount of Underexpenditure for Total Allotment

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

1OD% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$ 31.214.579.00 $

781.581.00

$ 36.394,889.70 1.509,107.40 $
$ 37,903,997.10

1,320,039.22

-649,019.44 $ 37,254,977.66

$

O.OD $

0.00

See notes to the general purpose financial statements. 35

CLARKE COUtID' BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPEN!lITURE REQUIREMENTS _By PROGRAM
GENERAL FUND QUALI1Y BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1998

GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten rJ Grades 1 3 rJ

Sub-ToIal- K-3 Grades 4 5 rJ

Grades 6 8 rJ

Grad.. 9 12 rJ

La_ High SChool Laboratories rJ

Vocational Education

rl

Total General and C8Jear Education Programs
SPECIAL EDUCATION PROGRAMS
Regular Programs Catagory I rJ categoryllrJ Category III rJ C8tegory IV (") Category V rJ

Sub-Total - Regular Category VI (Glflad) rJ
Total Special Education Programs REMEDIAL EDUCATION PROGRAM M

Total Fourteen Waighled Programs

MEDIA CENTER PROGRAMS
salaries Operations
Total Media e e - Programs

Total Fourteen WOighled and Media canter Programs

STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development

Tolal S1a1f Development Programs rJ Identifies Fourtaan Waighled Programs.
see notes to the general purpose financial statements.

- 36 -

AllOTMENTS FROM DEPARTMENT OF EDUCATION

ORIGINAL --'!i-

REQUIRED ORIGINAL

MID-TERM

2,811,216.00 6,573,995.00 9,185,211.00 2,490,969.00 4,030,230.00 3,417,830.00 1,181,004.00
891.761.00 21.197.005.00

$ 2,350,094.40 $

5.916.595.50

90 $ 8,266,689.90

90

2,241,872.10

90

3,627,207.00

90

3,078,047.00

90

1,062,903.60

90

802.584.90

19.077.304.50

0.00 0.00
0.00

5.180.346.00

4.682.311.40 $

228,990.00

5.180,346.00 2,991,845.00 8,171.991.00
655.901.00 30,024,897.00

90 $ 4.662.311.40 $

90

2,692,480.50

$ 7,354,791.90 $

90 $

590,310.90 $

27,022,407.30 $

228,990.00
228,990.00 0.00
228,990.00

786,561.00 90

707,904.90 $

0.00

174.131.00 90

156,717.90

960.692.00

$

864,622.80 $

0.00

30,98M89.00

$ 271887,030.10 $

22U90.00

165,974.97 144,355.03

165,974.97 144,355.03

310,330.00 100 $

310,330.00 $,

0.00 0.00
.:O~.oo::::.

SCHEDULE "6"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

2,350,094.40 $ 2,841,991.02

92,989.04 $ 2,934,990.06

5,916,595.50

7,720,436.96

353,463.42

6,073,920.28

8,296,889.90

10,562,427.88

448,472.46 $ 11,008.900.34

0.00

2,241,872.10

3,537,103.52

136,001.57

3,673,105.09

0.00

3,627,207.00

5,629,790.45

236,756.79

5,966,517.24

0.00

3,076,047.00

4,135.300.19

101,595.41

4,236,895.90

0.00

1,062,903.60

1,378,934.34

36,629.03

1,415,563.37

0.00

802.584.90

879,988.09

107,573.57

987.561.66

0.00

19,On.304.50

26,123,514.47

1,065,028.83 $ 27,188,543.30

$ 4.891,301.40

161,396.89 939,208.99 3,994,542.35 438,704.13 40,554.73

9,872.00 $ 104,557.94 61,897.n 11,070.47
222.00

171,268.89
1,043.766.93 4,056,440.12
449,n4.60 40,n6.73

4,891,301.40

5,574,407.09

187,620.18

5,762.027.27

0.00

2,692,490.50

2,674,653.01

60,715.02

2,735,368.03

0.00

7,563.781.90

8,249,060.10

248,335.20

8,497,395.30

590,310.90

601,671.87 $

6,675.19

608,347.06

0.00

27,251.397.30

34,974,246.44 $ 1,320,039.22

36,294,285.66

707,904.90

1,420,843.26

1,420,843.26

0.00

156,717.90

$

189,068.18

189,068.18

0.00

884,622.80 $ 1,420,843.28 $

189,068.18

1,609,711.44

28,11M20.10 $ 36.394[889.70

1.509.107.40 $ 37,903,997.10 $

0.00

165,974.97 144,355.03
$, _~3:.::10:.:,3:::30::;;.00:::;:.

166,222.19 144,355.03

166,222.19 144,355.03

310,577.22 $_....:3:.:1::.0,,;:5n:,:;:.22~

0.00

- 37 -

SECTION II COMPLIANCE AND IN1ERNAL CONTROL REPORTS

CLAUDE L. VICKERS
STAlE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 25, 1999

Honorable Roy E. Bames, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe Clarke County Board ofEducation
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of Clarke County Board of Education as of and for the year ended
June 30, 1998, and have issued our report thereon dated March 25, 1999. This report was qualified for a
scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Govemment Auditing Standards, issued by the Comptroller General of the United States.
We did not observe the taking ofeither the Federal donated commodities inventory or the purchased foods inventory at June 30, 1998, nor could we satisfY ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
Compliance
As part of obtaining reasonable assurance about whether Clarke County Board of Education's financial statements are free of material misstatement, we performed tests ofits compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results
of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.

98YB-40

Internal Control Over Financial Reporting
In planning and performing our audit, we considered Clarke County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the fmancial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the intemal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the intemal control over financial reporting that, in our judgement, could adversely affect Clarke County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FS-6291-98-02.
A material weakness is a condition in which the design or operation of one or more of the intemal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the intemal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition noted above is considered to be a material weakness.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:gp 98YB-40

CLAUDE L. VICKERS
STATE AUDITOR
(404)~2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 25,1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Clarke County Board ofEducation
REPORT ON COMPLIANCE WITH REOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Clarke County Board of Education with the types of compliance
requirements described in the u.s. Office ofManagement and Budget (OMB) Circular A-i33 Compliance
Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1998. Clarke County Board ofEducation's major Federal programs are identified in the accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Clarke County Board of Education's management. Our responsibility is to express an opinion on Clarke County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a clirect and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Clarke County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Clarke County Board of Education's compliance with those requirements.

98SA-IO

In our opinion, the Clarke County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 1998.
Internal Control Over Compliance
The management of Clarke County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Clarke County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-B3.
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter ofpublic record.
Respectfully submitted,

CLV:gp 98SA-IO

Claude L. Vickers State Auditor

SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

CLARKE COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6291-95-02 6291-95-03 6291-95-06 6291-96-01 FS-6291-97-01 FS-6291-97-02

Unresolved - See Corrective Action/Responses Further Action Not Warranted Further Action Not Warranted Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

EMPLOYEE COMPENSATION Salary OverpaymentJUnderpayment Finding Control Number: 6291-95-02

The Clarke Cmmty School District will not seek reimbursement for the overpayments of$4,127.44, nor issue a check for $100.00 to the underpaid employee noted in the 1995 fiscal year audit.

It is anticipated that the current financial software will be replaced by new fmancial and administrative software on or about November 15, 1999. This new software will use job code and salary tables to mechanize many calculations currently being performed manually.

GENERAL LEDGER Outstanding Loan Finding Control Number: FS-6291-97-01

This loan is a special Environmental Protection Agency loan that bears no interest. Given the terms of this loan, the Clarke County School District will continue to carry this loan until paid off.

GENERAL FIXED ASSETS FailUre to Maintain General Fixed Assets Account Group Finding Control Number: FS-6291-97-02

Due to budgetary limitations, the Clarke County School District does not intend to pursue the recording of general fixed assets on the financial statements at this time.

- 1-

CLARKE COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30. 1998

PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6291-96-05 6291-96-06

Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented

-2-

SECTION IV FINDINGS AND QUESTIONED COSTS

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30, 1998
SUMMARY OF AUDITOR'S RESULTS
I. Type ofReport Issued on the Financial Statements The auditor's opinion on the Clarke County Board of Education's financial statements was qualified for a scope limitation and for various departures from generally accepted accounting principles.
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Clarke County Board of Education disclosed a financial statement reportable condition related to the following control category.
General Fixed Assets
The reportable condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit of the Clarke County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Clarke County Board ofEducation did not disclose any reportable conditions in internal control over major programs.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Clarke County Board of Education's report on compliance with
requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-133 The Clarke County Board ofEducation's audit did not disclose audit findings required to be reported by section .5 IO(a) ofOMB Circular A-133.
7. Major Programs Federal awards audited as major programs are as follows: 10.550 Food Distribution Program 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 10.559 Summer Food Services Program for Children
8. Type "A" Program Dollar Threshold
The dollar threshold for type "An programs was $300,000.00.
9. Low Risk Auditee
The Clarke County Board of Education was not audited as a low risk auditee as defined by Section
.530 ofOMB Circular A-133.
-I -

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 1998
IT FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS
GENERAL LEDGER Outstanding Loan Nonmaterial Noncompliance Repeated From Prior Year Finding Control Nwnber: FS-629l-98-01
The General Fund had an unpaid loan outstanding in the amount of $130,642.42 at December 31,1997. Article IX, Section V, Paragraph V of the Constitution of the State of Georgia provides, in part, as follows:
"The governing authority of any county, municipality or other political subdivision of this State may incur debt by obtaining temporary loans in each year to pay expenses... Such loans shall be payable on or before December 31 of the calendar year in which such loan is made...".
Repayment ofloans should be made in conformity with constitutional limitations.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Nwnber: FS-629l-98-02
The Clarke County Board ofEducation did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements ofthe Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group.
ill FEDERAL AWARD FINDINGS AND OUESTIONED COSTS
No matters were reported.
-2-